The ongoing COVID-19 outbreak has led to a significant rise in consumption of items to mitigate the spread of the virus - including facemasks and disinfectant - and of daily necessities. Much of this purchasing is being conducted online, with measures to encourage people to stay at home leading to a surge in e-commerce activity.

CBRE's Japan Logistics Occupier Survey – which asked respondents a series of questions to gauge the short-, medium- and long-term impacts of COVID-19 on logistics demand – has found that changes to consumption behaviour are also having a far-reaching impact on the logistics sector.

When asked to describe the short-term impact of COVID-19, 22% of respondents selected "no significant change". However, 18% chose "shortage of warehouse workers", followed by “increasing cargo and delivery volume” (17%) and “shortage of delivery workers” (13%).

Figure 1: Changes or effects of COVID-19 outbreak over the next 1-2 months

Following the Great East Japan Earthquake in 2011, disruption to supply chains resulted in an increase in inventory and the rebuilding of distribution networks – a situation that survey respondents expect to reoccur after the COVID-19 outbreak. Regarding the medium- to long-term impact, the most selected response was "additional inventory for unexpected situations", which was chosen by 30% of logistics occupiers.

17% of respondents said that "automation of warehouse operations will be accelerated" in the medium- to long-term. With the number of workers struggling to keep up with rapidly increasing cargo volume, implementation of automation technology in logistics facilities is likely to accelerate once the outbreak has been contained.

While there is still much uncertainty around the extent of the economic impact of COVID-19, CBRE firmly believes the outbreak will drive further structural change in the logistics industry, while spurring additional demand for logistics facilities.

Figure 2: Changes or effects of COVID-19 outbreak in medium to long term